Interest on Advance Tax payable where belated instalment is discharged within the financial year; remedy not limited to rectification.

Clarifies that payment of advance tax made after an instalment due date but within the relevant financial year satisfies statutory conditions for interest on excess advance tax; the instalment default penalty regime does not automatically bar interest where the taxpayer pays within the year. Rejects confining the remedy to rectification proceedings as it would confer arbitrary discretion on the assessing officer. Where belated payment occurs shortly after the due date and the taxpayer shows bona fide compliance efforts, interest is payable on the advance tax paid within the financial year.

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Issues: Whether the assessee is entitled to interest under Section 217 of the Income-tax Act, 1961 on advance tax paid after the due date but within the relevant financial year.

Analysis: The Tribunal examined competing authorities and the statutory scheme distinguishing penalty for default in instalment payments from entitlement to interest on excess advance tax. The analysis considered whether belated payment after the instalment due date, but before the end of the financial year, deprives the assessee of interest; it reviewed precedents holding that payment within the financial year satisfies conditions for interest despite late instalment payment, and rejected the view that such cases automatically forfeit interest. The Tribunal further analysed the administrative consequences of treating the assessee's remedy as confined to rectification proceedings and found that such a rule would vest undue and inconsistent discretion in the assessing officer, producing arbitrary results. Applying these principles to the facts where the assessee paid the instalment shortly after the due date and made earnest efforts to comply, the Tribunal concluded that the statutory conditions for payment of interest were satisfied.

Conclusion: The assessee is entitled to interest under Section 217 of the Income-tax Act, 1961 on the advance tax paid after the due date but within the relevant financial year; decision is in favour of the assessee.

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